I know that we're in the midst of a crisis and all the "fixers" are running around saying let's not point fingers, or there's plenty of blame to go around; let's fix the problem and deal with the issue of who's to blame later. That's what we've done in Iraq. That's what we've done on Guantanamo. That's what we've done on wiretapping. That's what we've done with Katrina. Heck, that's what we're getting ready to do now.
The current administration pays lots of lip service to accountability. They like to hold teachers and school systems accountable for the failure of students who attend schools that are falling apart and have no textbooks. They like to point to the American worker as the problem for outsourcing -- we're just not willing to work for the same wages as the Mexican or Chinese worker. We're the ones who continued to buy cars that only got 12 miles to the gallon. We took out mortgages that we couldn't pay as our jobs went overseas and our health care costs rose. Well, believe me, we're being held accountable, each and every day. But what about the folks who really got us into this mess, the ones who endangered our retirement and college savings, our way of life -- the ones who contritely take their golden parachutes and sail off into the sunset, leaving us holding the bag? Where's the accountability? I heard an analyst on one of the financial cable networks say the other day that you can't claw back bonuses that have already been paid.
Well, folks (as our VP nominee likes to say), there is a way to hold accountable those who perpetrated this fraud on the American people. True, it won't put all the money back in the piggy bank, and it may miss some of the bad actors, but it will net some of those masters of the universe who, collecting large sums as CEOs and CFOs of the failing financial institutions, have driven us in a drunken splurge to the brink of economic disaster.
Perhaps some have forgotten that the preview of what's happening today came in 2001 -- no not the terrorist attacks on the World Trade Centers, but Enron (not surprisingly, Phil Gramm was involved in that piece of work as well). You may recall Master of the Universe Jeffrey Sklling sat in a Congressional hearing and said that the fundamentals of Enron were strong, the collapse of the company was a "liquidity crises"(sound familiar?). And Jeffrey Skilling's great contribution to the world of commerce? A company doesn't need assets. Skilling's ultimate fate is yet to be determined, but Congress did enact a piece of legislation to hold those in charge accountable -- it was called Sarbanes-Oxley; perhaps you've heard Republicans endlessly complaining about how it hobbles American business.
At the heart of SarBox (as it's affectionately known), are provisions that hold the CEOs and CFOs directly accountable. I'll provide the Wikipedia entry here so that you don't have to wade through the entire bill (emphasis in last 2 sentences is mine):
* 3) Corporate Responsibility
Title III consists of eight sections and mandates that senior executives take individual responsibility for the accuracy and completeness of corporate financial reports. It defines the interaction of external auditors and corporate audit committees, and specifies the responsibility of corporate officers for the accuracy and validity of corporate financial reports. It enumerates specific limits on the behaviors of corporate officers and describes specific forfeitures of benefits and civil penalties for non-compliance. For example, Section 302 requires that the company's "principal officers" (typically the Chief Executive Officer and Chief Financial Officer) certify and approve the integrity of their company financial reports quarterly.
So if the company's "principal officers" of these institutions signed the financial statements for their company, they should be held accountable. Even if they didn't know that the assets that were being shown on the books were of indeterminate value, I damned sure would have made it my job to find out before I put my signature on a financial statement, knowing that there might be civil and criminal penalties awaiting me for signing something that I didn't know was absolutely true.
SarBox was intended to restore integrity to the financial system, to hold someone personally accountable, to illustrate a willingness on the part of an individual to assume consequences in return for our trust.
So now we all have to wonder, as we taxpayers crawl on the hook for perhaps a Trillion dollars or more, if someone will be held accountable for the lies that led to this mess. Or will it be another instance of our being "shocked" into praising the arsonist for putting out the fire before the whole block burns down?
In the S&L crises, we had to turn the managers of the failed institutions to lead us out of the mess they created. Are we going to go down the same path again? Apparently all John McCain learned from his experience as one of the Keating Five is to call for some public servant's head (cynically knowing that it's all bluster and won't make a difference anyway to anyone).
No doubt, we need to pilot our way out of this mess and perhaps "President" Paulson (as Paul Krugman calls him) can lead us out, but Congress must now unequivocally state that the CEOs and CFOs who enriched themselves while signing financial statements that they either knew or didn't have a clue were false will be held accountable, and that they will suffer the civil and criminal penalties.
For those who cry that if we make the job too tough, then no one will take it, I say that maybe some jobs are better left undone. The past 20 years of financial malfeasance are nothing any self respecting family -- or nation -- should hold up as an accomplishment. Any thing less than abject shame is too little. While our planet has been warming, while our children have been left uneducated, while entire generations of humans are wasting away or dying of diseases that we can cure, we've been creating financial derivatives.
It's time the teachers and the workers and all the others who will have to pay the cost of this mess get a chance to hold someone accountable. Let's hold the ones who would rob you with a pen as accountable as the one who robs you with a six gun.